The British hostage is used as a reporter in the latest propoganda video by IS.YouTube

British hostage John Cantlie has appeared in a new propaganda video for Islamic State (IS).

The 43-year-old independent photojournalist was abducted by the terror group in Syria two years ago.

The five-minute video, titled 'Inside Ayn-Islam' is shot to resemble a professional news broadcast, with Cantlie serving as a reporter, as he appears to be walking through the war-torn Syrian town of Kobani.

He starts the 'report' by identifying himself and his location saying: "Hello, I'm John Cantlie and today we are in the city of Kobane on the Syrian-Turkish border."

We are here in the heart of the so-called PKK safe zone which is now controlled entirely by the Islamic State.

- John Cantlie

Kobani remains a strategic flashpoint with fierce fighting raging as IS extremists press ahead to take control of the border town

In the scripted video, Mr Cantlie dismisses claims that IS fighters are being driven out of the town by Syrian Kurds, asserting that on the contrary, they have gained control of large areas of the town, despite US-led airstrikes and recent Kurdish counter attacks.

"We are here in the heart of the so-called PKK safe zone which is now controlled entirely by the Islamic State," he explains.

"For a month now the soldiers of the Islamic State have been besieging this city and despite continual American air strikes, which so far have cost nearly half a billion dollars, the mujahideen have pushed deep into the heart of the city. They now control the eastern and southern sectors.'

"Now the battle for Kobane is coming to an end," he says. "The mujahedeen are just mopping up now, street to street, and building to building. You can occasionally hear erratic gunfire in the background as a result of those operations.

"But contrary to what the Western media would have you believe, it is not an all-out battle here now. It is nearly over. As you can hear, it is very quiet, just the occasional gunfire."

He adds: "Urban warfare is as about as nasty and tough as it gets, and it's something of a speciality of the mujahedeen."

Dressed in a loose-fitting black shirt, Mr Cantlie appears to be in good health. His beard also appears longer, prompting commentators to suggest that Cantlie might be on the verge of converting to Islam.

John Cantlie walks through the town of Kobani claiming the militants are close to winning the battle for control of the border town.YouTube

The Foreign Office says it is aware of the tape and is analysing its content.

This is the sixth anti-west video to feature Mr Cantlie. In previous propaganda videos he has accused the British and US governments of failing to negotiate the release of the hostages and charged David Cameron with using the deaths of his fellow hostages "to fan the flames of war."